Glatfelter Navigates Industry Challenges with Resilience, Adjusts EBITDA Outlook

In a turbulent second quarter of fiscal 2023 (Q2 FY23), Glatfelter, a renowned 3

global supplier of engineered materials, showcased its adaptability as it reported net sales of $357 million. Despite this, the company faced a GAAP net loss of $36.6 million, attributing the setback to a perfect storm of industry-wide market weakness and customer destocking.

Industry experts point to Glatfelter’s proactive measures in mitigating the impact of these challenges. The company’s strategic approach included navigating supply chain disruptions and effectively managing inventory levels, which resulted in a commendable earnings loss of approximately $7 million.

Airlaid materials, a key segment for Glatfelter, saw a notable upswing in Q2 FY23 net sales, with a significant increase of $8.8 million compared to the previous year. This surge was primarily attributed to shrewd pricing actions and innovative cost pass-through arrangements. These moves proved vital in countering the inflationary pressure stemming from rising raw material and energy costs. However, even with this impressive sales growth, Q2 FY23 EBITDA for the airlaid materials segment fell by $2.1 million compared to the same period in the previous year, amounting to $17.4 million.

The composite fibres division at Glatfelter displayed its prowess in revenue generation by raking in an additional $2.4 million in Q2 FY23 compared to the year-ago quarter. Higher selling prices were identified as the driving force behind this surge. However, the segment’s EBITDA witnessed a dip, sliding to $4.8 million in Q2 FY23 from $10.6 million in the previous year’s second quarter.

In contrast, spunlace revenue experienced a downturn of $17.5 million in Q2 FY23, primarily due to lower shipments. Yet, Glatfelter’s astute pricing strategies and favorable currency translation managed to mitigate the blow. This prudent maneuvering resulted in a remarkable nearly doubling of spunlace’s EBITDA, reaching an impressive $2.2 million in the second quarter.

As Glatfelter continues to steer through the industry headwinds, the company has proactively adjusted its full-year adjusted EBITDA guidance. The revised range now stands between $100 million and $110 million, showcasing Glatfelter’s commitment to fiscal responsibility and operational excellence.

While the challenges faced in Q2 FY23 were undoubtedly formidable, Glatfelter’s resilience, innovative strategies, and dynamic management approach have paved the way for a promising trajectory in the face of adversity. The company’s ability to navigate market fluctuations and swiftly adapt to changing circumstances highlights its continued relevance as a global leader in engineered materials.


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